1099 Formhttp://www.businessinsider.com/category/1099-form
en-usSun, 02 Aug 2015 19:10:40 -0400Sun, 02 Aug 2015 19:10:40 -0400The latest news on 1099 Form from Business Insiderhttp://static3.businessinsider.com/assets/images/bilogo-250x36-wide-rev.pngBusiness Insiderhttp://www.businessinsider.com
http://www.businessinsider.com/uber-lyft-more-trouble-coming-from-former-drivers-2015-7The driver who beat Uber is just the beginning — get ready for a flood of copycat caseshttp://www.businessinsider.com/uber-lyft-more-trouble-coming-from-former-drivers-2015-7
Tue, 14 Jul 2015 14:40:00 -0400Biz Carson
<p><img style="float:right;" src="http://static2.businessinsider.com/image/5501931b6da81145188dbfb4-600-/uber-lyft-1.jpg" alt="uber lyft" width="600" border="0" /></p><p></p>
<p>Barbara Ann Berwick delivered a potentially huge blow to Uber &mdash; and the on-demand economy as a whole &mdash; when the former Uber driver&nbsp;<a href="http://www.businessinsider.com/california-labor-commission-rules-uber-drivers-are-employees-2015-6">was declared an employee</a>, not an independent contractor, by the California Labor Commissioner's Office in June.</p>
<p><span style="line-height: 1.5em;">As high-profile as Berwick's case became, she's not alone.</span></p>
<p><span style="line-height: 1.5em;"></span><span style="line-height: 1.5em;">There are at least three other open cases that ride-hailing companies are actively fighting in California, according to records obtained by Business Insider:&nbsp;</span><span style="line-height: 1.5em;">&nbsp;</span></p>
<ul>
<li><span style="line-height: 1.5em;"><strong>Lyft is facing its first and only case.</strong> A former Lyft driver filed in February 2014 to reclaim wages for 46 hours of overtime for a two month period and expenses totalling $1,599.68. The hearing was scheduled for today, but has been continued until September, according to Lyft.</span></li>
<li><span style="color: #222222; line-height: 1.5em;"><strong>Uber has a conference for a Los Angeles-based case today, </strong>according to Department of Industrial Relations records<strong>.</strong>&nbsp;The ex-driver is claiming more than $6,000 in reimbursable expenses, commission and unauthorized deductions from their wages.&nbsp;</span></li>
<li><span style="color: #222222; line-height: 1.5em;"><strong>Another Uber case just had a conference in June.</strong> Filed in May 2015, this case is awaiting a date for a hearing, according to Department of Industrial Relations records. The wage claims involved include a month's pay of $184.80 and a bonus of $1,896.</span></li>
</ul>
<p>Uber has often settled these cases rather than litigating. An April 2015 case resulted in an $800 settlement, another case was settled outside of the Labor Commissioner's Office. Three other claims against Uber were canceled or no-shows.</p>
<h2>These are not guaranteed wins</h2>
<p><span>The claims revolve around the employment status of so-called 1099 contractors, called that because of the 1099 IRS form they fill out, who are the primary workforce for a lot of on-demand companies, including ride-hailing services Uber and Lyft.</span></p>
<p><span>Because they're not employees of the company, they do not receive certain benefits like overtime pay or reimbursement for expenses.</span></p>
<p><span>Some drivers are beginning to fight this classification and have filed complaints with the California Labor Commissioner's Office to reclaim wages, including overtime pay and mileage expenses.&nbsp;</span></p>
<p><span>Berwick was the first case Uber faced in the Labor&nbsp;<span>Commissioner's Office</span> where the plaintiff won and was declared an employee. In turn, Uber had to pay more than $4,000 to Berwick.&nbsp;The company is now&nbsp;<a href="http://www.businessinsider.com/afp-california-ruling-against-uber-hits-at-business-model-2015-6">appealing the labor commission's decision</a>, and Berwick will be facing a court date in October.</span></p>
<p>Just because there are more cases in the pipeline doesn't mean it's the death of the on-demand economy. It's more like a game of Russian Roulette &mdash; and one that features a moving target.&nbsp;</p>
<p>"<span style="line-height: 1.5em;">You may have a case where someone</span> puts together terrible records. Same thing with Uber. It&rsquo;s a really complicated field of law," said <a href="http://www.mhpsf.com/MHPSF/Cliff_Palefsky.html">Cliff Palefsky</a>, an employment lawyer at&nbsp;McGuinn, Hillsman &amp; Palefsky.</p>
<p><span style="line-height: 1.5em;">Berwick won, she says, because she's a "seasoned litigator" &mdash; a search for her name returns 26 cases in San Francisco courts alone &mdash; and because she came in prepared for her case.&nbsp;</span></p>
<p><img src="http://static6.businessinsider.com/image/55a06fc369bedde50af7425b-1200-924/barbara-berwick-1.jpg" alt="Barbara Berwick " border="0" /></p>
<p><span style="line-height: 1.5em;">Labor&nbsp;<span>Commissioner's Office</span> rulings don't set precedent for future cases, but Berwick's win does mean that a playbook to winning a case is out there, said Rich Reibstein, </span><a href="http://www.pepperlaw.com/people/richard-j-reibstein/">a partner at Pepper Hamilton</a><span style="line-height: 1.5em;"> and co-chair of its independent contractor compliance group.</span></p>
<p>"There can be a lot of individual cases. It&rsquo;s true that none of them that likely have legally precedential value for the next case because each case turns on it own facts," Reibstein said. "However, once the facts are known in the particular case, the next claimant is likely to piggy back on that same evidence."</p>
<h2>There will be more</h2>
<p>It's not just ride-hailing companies facing these claims &mdash; Instacart and Sprig have also had cases filed against them, according to a request with the California Department of Industrial Relations. The Sprig case was closed, as was one case involving Instacart. <span style="line-height: 1.5em;">A second Instacart case reached a settlement in April 2015 for $898.43.</span></p>
<p>Employment lawyer Palefsky isn't surprised by the number of cases and cautions that these are likely to continue as well until there is one ruling, or a legislative change, that makes it clearer.&nbsp;</p>
<p>"It just shows that until there is some resolution by a higher authority you can be litigated endlessly. Its going to be a case by case at the lower level and it&rsquo;s going to be a moving target," Palefsky said.</p>
<p>But the more cases are filed and become public, the more new cases could emerge &mdash; especially as plaintiffs follow the (potential) money.</p>
<p>"All on-demand companies in the sharing economy have probably shuddered when reading about these Uber lawsuits and commissioner rulings because these legal setbacks to Uber are in the nature of a clarion call to class action lawyers to look closely at these on demand companies to see whether there are lawsuits to be filed," Reibstein said.&nbsp;</p>
<p><img style="float:right;" src="http://static4.businessinsider.com/image/55a4529d69beddb029d0c6b5-561-421/washio-delivery-6.png" alt="Washio Delivery" width="600" border="0" /></p>
<p>Lawyers have heard the call, and many of the on-demand companies are, indeed, facing these lawsuits. Shannon Liss-Riordan, a Boston-based employment lawyer, has <a href="http://www.businessinsider.com/postmates-shyp-and-washio-hit-with-legal-action-from-contractors-2015-7">filed both in court and in arbitration</a> class-action cases against Uber, Lyft, Instacart, Shyp, Washio, Homejoy, Caviar, and Postmates.</p>
<p>Even in the face of litigation, both Uber and Lyft remain steadfast in their hiring of independent contractors.</p>
<p><span style="line-height: 1.5em;">"U</span><span style="line-height: 1.5em;">ber has not received notice of these claims so we are unable to comment on the specifics of </span>each case, but it&rsquo;s important to remember that the number one reason drivers choose to use Uber is because they have complete flexibility and control," an Uber spokesperson said. "Most driver partners can and do choose to earn their living from multiple sources, including other ride sharing companies, and,&nbsp;like the vast majority of independent contractors&nbsp;in the U.S., &nbsp;73% of Uber partners say&nbsp;they would rather have a job where they choose their own schedule and are their own boss than a steady 9-5 job."</p>
<p>Like Uber drivers, Lyft said their drivers like staying independent contractors.</p>
<p>"Lyft drivers are not employees," a Lyft spokesperson said. "They use Lyft, and other on-demand services, as a flexible and reliable way to make ends meet without having to be stuck in a schedule that doesn&rsquo;t work for them. We hear from drivers that this flexibility is one of the main reasons they choose Lyft."</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/barbara-ann-berwick-teaching-uber-drivers-how-to-become-employees-2015-7" >The driver who beat Uber will teach you how to do it too — for $50</a></strong></p>
<p><a href="http://www.businessinsider.com/uber-lyft-more-trouble-coming-from-former-drivers-2015-7#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/failcon-conference-guest-travis-kalanick-2015-1">Uber CEO Gave This Raw Speech About Failure In 2011</a></p> http://www.businessinsider.com/uber-fights-california-class-action-lawsuit-2015-7Uber: We're not a taxi service, we're a 'lead generation' apphttp://www.businessinsider.com/uber-fights-california-class-action-lawsuit-2015-7
Thu, 09 Jul 2015 17:32:05 -0400Biz Carson
<p><img style="float:right;" src="http://static2.businessinsider.com/image/559edf8569bedd850f34f54a-600-/uber-126.jpg" border="0" alt="Uber" width="600"></p><p>Uber <a href="http://www.businessinsider.com/r-uber-pushes-back-against-california-driver-lawsuit-2015-7">is fighting back against a federal class-action lawsuit</a> that seeks to reclassify all of its drivers in California from independent contractors to employees.</p>
<p>In court documents filed with the Northern California District Court on Thursday, Uber argued that the <a href="http://www.businessinsider.com/shannon-liss-riordan-the-lawyer-behind-ubers-lawsuit-2015-5">class-action part of the suit</a> should be dropped because the 160,000 drivers "have little or nothing in common, other than their use of the Uber App in California at some point over the past six years."</p>
<p><span style="line-height: 1.5em;">Here's the most interesting parts from Uber's argument:</span></p>
<ul>
<li><strong>Uber is calling itself a "lead generation" app&nbsp;</strong>that&nbsp;connects buyers and sellers — in this case, people who want rides and drivers who sell them. So Uber and other ride-hailing services are actually similar to eBay and Etsy. "Lead generation platforms such as Uber similarly coordinate transactions between drivers and passengers," wrote Professor Justin McRary, an expert hired by Uber, in his testimony.&nbsp;</li>
<li><strong>Uber has used 17 different agreements to sign up drivers</strong>, so it argues drivers can't be classified as a group. These driver agreements change in many "legally significant ways" including whether they can drive for competitors, can be terminated without cause, and whether they must resolve disputes through arbitration.</li>
<li><strong>Uber claims a plaintiff has admitted to defrauding Uber</strong> out of $25,000 and so he doesn't reflect the "class" of drivers. In a deposition, one of the plaintiffs admitted to referring drivers to the app temporarily, paid drivers to complete "sham rides", and collected more than $25,000 in referral payments during his time as an Uber driver, the motion said.</li>
</ul>
<p>The case is scheduled to begin trial in August.</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/barbara-ann-berwick-teaching-uber-drivers-how-to-become-employees-2015-7" >The driver who beat Uber will teach you how to do it too — for $50</a></strong></p>
<p><a href="http://www.businessinsider.com/uber-fights-california-class-action-lawsuit-2015-7#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/uber-versus-taxi-california-2015-6">Is Uber really cheaper than a taxi?</a></p> http://www.businessinsider.com/barbara-ann-berwick-teaching-uber-drivers-how-to-become-employees-2015-7The driver who beat Uber will teach you how to do it too — for $50http://www.businessinsider.com/barbara-ann-berwick-teaching-uber-drivers-how-to-become-employees-2015-7
Wed, 08 Jul 2015 15:46:00 -0400Biz Carson
<p><img style="float:right;" src="http://static1.businessinsider.com/image/559d6d2e69beddba7ceccdd9-600-/barbara-berwick-uber-suit-2.jpg" border="0" alt="barbara berwick uber suit" width="600"></p><p>Barbara Ann Berwick delivered a potentially huge blow to Uber when <a href="http://www.businessinsider.com/california-labor-commission-rules-uber-drivers-are-employees-2015-6">she was declared an employee</a>, not an independent contractor, by the California Labor Commission in June.</p>
<p>She was awarded more than $4,000 for her employee expenses from the ride-hailing company.</p>
<p>Now she wants to teach other drivers how to do the same.</p>
<p>Berwick's <a href="http://rideshareschool.com/">Rideshare School</a> launched Tuesday and promises to&nbsp;teach "drivers from ridesharing services how to enforce their rights as employees and reclaim funds for driving expenses, overtime, and more."&nbsp;</p>
<p><span style="line-height: 1.5em;">Berwick will charge $50 for the three-hour class, and will hold it twice a week at her home in San Francisco.&nbsp;</span></p>
<p><span style="line-height: 1.5em;">Winning your case, Berwick said, is much harder than showing up. And since her case was a win at the labor-commission level, the result only applies to Berwick.</span></p>
<p>"Y<span style="line-height: 1.5em;">ou can’t say I drove 'I’m an employee, pay me'. The fact that I won my case at the EDD does not set a precedent," Berwic</span>k said.</p>
<p>For one thing, if drivers are working for multiple companies at the same time, "your litigation will definitely fail," Berwick said. The drivers may be able to claim for mileage or other specific items, but won't be able to claim expenses or overtime because there's no way to easily split the items.</p>
<p>That's just one pitfall some drivers may face going against ride-hailing companies.</p>
<p>Berwick offered another example: Suppose the commissioner asks if your job is time-based or project-based. A driver could respond that it's project-based because they are picking up each passenger to complete a task, or they could say it's time-based because they are responsible for getting the person there in the shortest amount of time — a stop for lunch along the way would mean a low rating and potentially getting fired, Berwick explained.</p>
<p>The correct answer for purposes of getting classified as an employee is time-based: That's one characteristic of employment. Projects signal more of a contractor status, Berwick said.</p>
<p>There are also complexities surrounding the paperwork you need to provide and try to get submitted as evidence.</p>
<p>"You have to know what to argue," Berwick said. "If you get careless, you can make a point that strikes the other side's argument."</p>
<p><span>Berwick won, she said, because she's a "seasoned litigator." A search for her name returns 26 cases in San Francisco courts alone, and she can recite the address of the labor commission off the top of her head.</span></p>
<p>Uber is now <a href="http://www.businessinsider.com/afp-california-ruling-against-uber-hits-at-business-model-2015-6">appealing the labor commission's decision</a>, and Berwick will be facing a court date in October. Until then, she hopes she'll be teaching other drivers how to come out ahead in face of the teams of lawyers for the ride-sharing companies.</p>
<p>"They will win," Berwick said of Uber and Lyft. "An unprepared litigant will lose."</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/r-ex-uber-driver-says-her-phone-sex-business-helped-her-tackle-uber-2015-6" >Ex-Uber driver says she used her experience running a phone sex company to beat Uber in court</a></strong></p>
<p><a href="http://www.businessinsider.com/barbara-ann-berwick-teaching-uber-drivers-how-to-become-employees-2015-7#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/uber-versus-taxi-california-2015-6">Is Uber really cheaper than a taxi?</a></p> http://www.businessinsider.com/postmates-shyp-and-washio-hit-with-legal-action-from-contractors-2015-7The lawyer fighting for Uber and Lyft employees is taking the fight to four more companieshttp://www.businessinsider.com/postmates-shyp-and-washio-hit-with-legal-action-from-contractors-2015-7
Wed, 01 Jul 2015 17:18:19 -0400Biz Carson
<p><img style="float:right;" src="http://static4.businessinsider.com/image/55943748eab8eace18d8d3ce-600-/washio-delivery-4.png" border="0" alt="Washio Delivery" width="600"></p><p>The lawyer who sued Uber and Lyft for not classifying contract workers as employees is now representing workers against four more on-demand companies: delivery services Postmates and Instacart, laundry service Washio, shipping company Shyp.</p>
<p><span>"I hope companies realize this isn’t something to fool around with," said their lead attorney, <a href="http://www.llrlaw.com/attorneys/shannon.htm">Shannon Liss-Riordan</a>. "They’re violating labor laws."</span></p>
<p>Workers from Postmates, Shyp, and Washio sued their employers this week, arguing that they should be classified as employees and not independent contractors. Liss-Riordan<span style="line-height: 1.5em;">&nbsp;filed all three cases on June 29.</span></p>
<p><span style="line-height: 1.5em;"><span>In addition, while there's already a case against Instacart in California, Liss-Riordan has filed a different class-action case against Instacart on June 30, but limited to Massachusetts.&nbsp;</span></span></p>
<p>Liss-Riordan is already&nbsp;<a href="http://www.businessinsider.com/shannon-liss-riordan-the-lawyer-behind-ubers-lawsuit-2015-5">fighting to reclassify Uber and Lyft drivers</a> in two cases that will go to a jury trial in August.&nbsp;She's also filed lawsuits against cleaning service Homejoy, food delivery startup Caviar, and a different case against Postmates on behalf of its couriers.</p>
<p><span style="line-height: 1.5em;">The Shyp, Instacart, and Postmates customer service cases were filed as "class action arbitration demands" in arbitration courts because of their contracts, Liss-Riordan said.</span></p>
<p><span style="line-height: 1.5em;">Postmates did not return a request for comment. Washio and Instacart had no comment, and Shyp was still reviewing the claim. (We'll update this post as we hear back.)</span></p>
<h2><strong>The lawsuits strike at the core of the so-called "1099 economy"</strong></h2>
<p>The difference between the 1099 workers and W-2 employees,&nbsp;<a href="http://www.irs.gov/Businesses/Small-Businesses-&amp;-Self-Employed/Independent-Contractor-Self-Employed-or-Employee">according to the IRS</a>, is that for common-law employees, employers "must withhold income taxes,&nbsp;withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages paid." The same is not necessarily true for an independent contractor.</p>
<p>In addition, benefits are often extended to employees but not independent contractors, and employers have the right to control how a worker behaves — how to dress, for example, or specific customer interaction protocol — when they're an employee and not an independent contractor.</p>
<p><span style="line-height: 1.5em;">Each of these new filings alleges different ways each company is controlling their workers, which may indicate that they are employees under law.</span></p>
<ul>
<li><span style="line-height: 1.5em;"><strong>Washio</strong>&nbsp;hires drivers, or "ninjas," to deliver laundry as part of its on-demand laundry and dry cleaning service. According to the court filing, the company makes Washio drivers agree to an exclusivity arrangement, where they agree not to provide service for similar businesses. They're also paid a fee for each pick-up and delivery, the complaint alleges.&nbsp;</span></li>
<li><span style="line-height: 1.5em;"><strong>Shyp</strong>'s couriers operate in a similar way to Washio's, although its "Heroes" get paid hourly to pick-up packages. They're instructed to "always bubblewrap fragile items" and claim to receive warnings for rejecting too many pick-ups, the arbitration demand alleges.</span></li>
<li><span style="line-height: 1.5em;">In the newest claim against <strong>Postmates</strong>, pay for its customer service reps is the issue.&nbsp;</span><span style="line-height: 1.5em;">According to the arbitration demand, the representatives make 35 cents for each delivery they facilitate. If a store doesn't pick up the phone, the representative has to call back four times in two minutes before doing a search to see if the business is closed, the claim alleges. One plaintiff estimated in the arbitration demand that she worked 30 hours in April 2015, but only made $45.85 for 131 calls.&nbsp;</span></li>
</ul>
<p><img style="float:right;" src="http://static3.businessinsider.com/image/5536521c6da81111437beefd-1200-800/professional%20packaging%20in%20our%20facility.jpg" border="0" alt="shyp" width="600">"I’ve been amazed to see how far companies are stretching it. So many companies just seem to watched what Uber did and think it’s ok," Liss-Riordan said. "It’s like they just sort of assumed they don’t have to worry about it. I just find it unbelievable."&nbsp;</p>
<p>The issue is starting to gain steam after the&nbsp;<a href="http://www.businessinsider.com/california-labor-commission-rules-uber-drivers-are-employees-2015-6">California Labor Commission ruled last month</a>&nbsp;that an Uber driver, who filed a suit against the company for misclassifying her as an independent contractor, was actually an employee.</p>
<p>Shyp, the package shipping service, announced Wednesday that it would be <a href="http://www.businessinsider.com/shyp-is-reclassifying-its-workers-as-employees-2015-7">reclassifying all of its couriers</a>&nbsp;as employees. The change is effective immediately as it rolls out to new cities like Chicago. For existing workers, employee status will begin January 1, 2016, <a href="http://www.fastcompany.com/3048057/tech-forecast/why-on-demand-shipping-service-shyp-is-turning-its-couriers-into-employees">according to Fast Company</a>. A company spokesperson said the decision has had nothing to do with the arbitration demand.</p>
<p>Instacart <a href="http://www.businessinsider.com/why-instacart-is-reclassifing-some-of-its-workers-as-employees-2015-6">announced in June</a> that it would also transition some of its shoppers to W2-employees in select markets.</p>
<p>Liss-Riordan called the moves to reclassify contractors as employees "a step in the right direction." Should her cases win in court, Liss-Riordan said the companies would only be responsible for back pay up until the date they are switched over to employee status. Companies that do switch can "limit their exposure moving forward," she said.</p>
<p>"FedEx battled me for 10 years," Liss-Riordan said. "I’m ready to hang in there and fight for for however long they want to fight."&nbsp;</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/shannon-liss-riordan-the-lawyer-behind-ubers-lawsuit-2015-5" >This lawyer fought for FedEx drivers and strippers. Now she's standing up for Uber drivers</a></strong></p>
<p><a href="http://www.businessinsider.com/postmates-shyp-and-washio-hit-with-legal-action-from-contractors-2015-7#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/facts-about-greek-economy-bailout-euro-crisis-2015-6">6 mind-blowing facts about Greece's economy</a></p> http://www.businessinsider.com/shannon-liss-riordan-the-lawyer-behind-ubers-lawsuit-2015-6Meet the lawyer fighting to get Uber and Lyft drivers classified as employeeshttp://www.businessinsider.com/shannon-liss-riordan-the-lawyer-behind-ubers-lawsuit-2015-6
Wed, 17 Jun 2015 12:17:25 -0400Biz Carson
<p><img style="float:right;" src="http://static3.businessinsider.com/image/5565ea6feab8eaf118e3045c-600-/shannon-liss-riordan.jpg" border="0" alt="Shannon Liss-Riordan" width="600"></p><p><em>Today, the <a href="http://www.businessinsider.com/california-labor-commission-rules-uber-drivers-are-employees-2015-6">California Labor Commission ruled </a>that Uber and Lyft drivers are employees, not indepdendent contractors. It's not the final word in the case by any means, but it will help bolster the case for the group of drivers who have sued the companies to gain employee status in California.</em></p>
<p><em>We interviewed the lawyer representing those drivers, Shannon Liss-Riordan, earlier this month. Here's the interview:</em></p>
<p>Shannon Liss-Riordan was having dinner in San Francisco when a friend insisted he show her this life-changing app.</p>
<p><span style="line-height: 1.5em;">He opened up Uber and walked her through the process: you set your location and a driver in their own car comes and picks you up. Everyone's private driver, as the company first advertised.</span></p>
<p><span style="line-height: 1.5em;">The app would change Liss-Riordan's life, but not for the reasons her friend was thinking. </span></p>
<p><span style="line-height: 1.5em;">Instead of being awed by its car-summoning abilities, Liss-Riordan's brain, like always, was focused on the people powering the business.</span></p>
<p class="p1"><span class="s1">"</span><span style="line-height: 1.5em;">I’m standing there looking at him, and he looks up at me and realizes what’s going through my head.&nbsp;<span>And he says 'N</span></span><span style="line-height: 1.5em;">o, don’t you dare. You’re going to put this company out of business, aren’t you?"</span><span style="line-height: 1.5em;">&nbsp;Liss-Riordan told Business Insider.&nbsp;</span><span style="line-height: 1.5em;">"That was my first introduction to Uber. I didn’t actually sue them until a year or more after that."</span></p>
<p class="p1"><span style="line-height: 1.5em;"><span>Liss-Riordan, a Boston-based employment rights lawyer, waited until</span>&nbsp;August 16, 2013, to be exact.&nbsp;</span><span style="line-height: 1.5em;">She later filed a similar suit against Lyft. Both suits have since been whittled down to workers in California.</span></p>
<p class="p1"><span style="line-height: 1.5em;">At the heart of the matter is a how these companies classify their workforce.</span></p>
<h2 class="p1"><strong><span style="line-height: 1.5em;">The "1099 economy"</span></strong></h2>
<p class="p1"><span style="line-height: 1.5em;">Uber and Lyft drivers claim their drivers are independent contractors, not employees. Seen through Silicon Valley's rose-colored lenses, these are self-fulfilling entrepreneurs sitting behind the wheel, taking control of their own destinies and filling their schedules with as little or as much work as they want. </span></p>
<p class="p1"><span style="line-height: 1.5em;"><img style="float:right;" src="http://static2.businessinsider.com/image/5425d98feab8eaa87ce14f55-1200-858/img_6377-2.jpg" border="0" alt="lyft driver" width="600">These folks make up the backbone of what's known as the "1099 economy," because these flexible workers</span><span style="line-height: 1.5em;">&nbsp;fill out the tax form known as the 1099 MISC, used for freelancers and contractors, rather than a W2, used for full-time employees.&nbsp;They do the labor at most of the "<a href="http://www.businessinsider.com/san-francisco-tech-startups-replacing-mom-2015-5">Uber for X" companies</a> that have proliferated in the last few years, particularly in the San Francisco Bay Area.&nbsp;</span></p>
<p class="p1"><span style="line-height: 1.5em;"><span>By using contractors instead of employees, companies are not responsible for things like payroll taxes, job expenses, anti-discrimination protections or overtime pay. For bootstrapped startups, it's a cost-saving measure that can mean life or death.&nbsp;</span></span></p>
<p class="p1"><span style="line-height: 1.5em;">But Liss-Riordan isn't drinking the same venture-capital bought kool-aid as the startups who have built businesses around the 1099 economy. Rather, she views it</span><span style="line-height: 1.5em;">&nbsp;as another example of companies using contract workers as a way to skirt their obligations as an employers.</span></p>
<p class="p1"><span style="line-height: 1.5em;">"</span>I don’t believe this industry needs to be built on a system whereby the workers don’t need to receive any of the protections that we have a society that workers need to receive," she said. "I just don’t know how Uber can argue with a straight face that as a $40 billion dollar company it can’t afford to insure its drivers, pay minimum wage or pay overtime, or be reimbursed for their expenses. This is not going to put Uber out of business."</p>
<h2 class="p1"><span style="line-height: 1.5em;">What FedEx and strippers can teach Uber</span></h2>
<p class="p1"><span style="line-height: 1.5em;"><span style="line-height: 1.5em;">Liss-Riordan said she can see through Uber's smoke and mirrors because she has seen companies try to do the same thing before, whether it was FedEx misclassifying their drivers or night clubs doing the same with their exotic dancers.</span></span></p>
<p class="p1"><span style="line-height: 1.5em;"><span style="line-height: 1.5em;"><span>"They try to claim that because they’re providing services through an app they’re somehow different from all these companies I’ve been suing for all these years," Liss-Riordan said. "I just don’t believe that."</span></span></span></p>
<p class="p1"><span style="line-height: 1.5em;"><span style="line-height: 1.5em;">She first started looking into employment law after she worked with outspoken lawyer and former congresswoman Bella Abzug right out of college.&nbsp;</span></span><span style="line-height: 1.5em;">After graduating from Harvard Law, she went to a labor union in Boston where she ended up embroiled in wage and hour disputes.</span><span style="line-height: 1.5em;">&nbsp;</span><img src="http://static4.businessinsider.com/image/5565fdf46da811ce22e7d6fd-799-532/slr photo - 2015 - 2.jpg" border="0" alt="Shannon Liss-Riordan"></p>
<p class="p1"><span style="line-height: 1.5em;"><span>"</span><span>One case led to another and before I knew it I had spent a decade representing wait staff against restaurants and hotels and country clubs," Liss-Riordan said. One particular case&nbsp;</span></span><span style="line-height: 1.5em;">even led Liss-Riordan to buy part of a pizzeria and split the ownership with the employees. The pizzeria opened in 2013 with a new name:&nbsp;</span><span style="line-height: 1.5em;"></span><a href="http://thejustcrust.com/story/">The Just Crust</a><span style="line-height: 1.5em;">.&nbsp;</span></p>
<p class="p1"><span style="line-height: 1.5em;">It wasn't just wait staff that came to Liss-Riordan and her law firm, Lichten &amp; Liss-Riordan.&nbsp;</span></p>
<p class="p1"><span style="line-height: 1.5em;">Take the case of exotic dancers. Like Uber, the night clubs were arguing they were just a platform for dancers, despite keeping a percentage of the earnings and charging the dancers for each shift. </span><span style="line-height: 1.5em;">Liss-Riordan </span><a href="https://medium.com/ondemand/what-strippers-can-teach-uber-1f5b15e5b427">won the case for the strippers</a><span style="line-height: 1.5em;">.</span></p>
<p class="p1"><span style="line-height: 1.5em;"><img style="float:right;" src="http://static6.businessinsider.com/image/5566266ceab8eaee28d75d44-671-503/fedex-man-delivering-packages-2.jpg" border="0" alt="Fedex Man Delivering Packages">One of her most famous wins was a case against FedEx. </span></p>
<p class="p1"><span style="line-height: 1.5em;">Like Uber, it had been classifying its delivery drivers as independent contractors and not employees, even though they wore FedEx uniforms and drove trucks with the FedEx logo. A Massachusetts judged ruled in Liss-Riordan's favor, and the case has been repeated in several other states. (FedEx has now <a href="http://www.dcvelocity.com/articles/20150219-judge-rules-in-favor-of-fedex-ground-hunt-in--massachusetts-worker-classification-cases/">successfully appealed</a>, and it is back in court.)</span></p>
<p class="p1"><span style="line-height: 1.5em;">While Uber drivers don't wear uniforms or drive logo-emblazoned trucks around, they are arguably more monitored than the FedEx drivers are because of the constant rating system and the threat of termination if it drops too low, Liss-Riordan argued.</span></p>
<p class="p1"><span style="line-height: 1.5em;">"</span><span style="line-height: 1.5em;">Uber, like I have seen in a lot of these cases, is trying to argue that they are something different, that their drivers are something different. Just like FedEx tried to tell its drivers that. Just like strip clubs tried to tell their entertainers that," Liss-Riordan said. "But the truth is that they’re not. They get in, they do the work and they’re told how to do it and they have these rules they have to follow and they’re evaluated on a real-time basis."</span><strong style="line-height: 1.5em;"><br></strong></p>
<h2 class="p1"><span style="line-height: 1.5em;"><span>Square pegs, round holes &nbsp;</span></span></h2>
<p class="p1"><span class="s1" style="line-height: 1.5em;"><span>There's no easy litmus test, though, as to determine who is an employee and who is an independent contractor. The California Department of Industrial Relations says on its website that there is "no clear definition" of the term independent contractor — signing a 1099 form doesn't mean you are one.</span></span></p>
<p class="p1"><span class="s1" style="line-height: 1.5em;"><span class="s1">In cases of misclassification, its up to the courts to decide. In March, two judges <a href="http://www.forbes.com/sites/ellenhuet/2015/03/11/lyft-uber-employee-jury-trial-ruling/">ruled Liss-Riordan's Uber and Lyft cases will go to a trial by jury</a>. Uber had been asking for a summary judgement because it argued that it was a technology company, not a transportation company. </span></span></p>
<p class="p1"><span class="s1" style="line-height: 1.5em;"><span class="s1"><img style="float:right;" src="http://static2.businessinsider.com/image/5566273469bedd41098a841c-855-641/judge-chen-1.jpg" border="0" alt="judge chen" width="600">U.S. District Judge Edward Chen didn't buy it. "<span>The idea that Uber is simply a software platform, I don’t find that a very persuasive argument," he said in court.</span></span></span></p>
<p class="p1"><span class="s1" style="line-height: 1.5em;"><span>In the Lyft case, U.S. District Judge Vince Chhabria said in his decision that he's not sure if Lyft drivers fit in either category of California's "outdated" employment codes.</span></span></p>
<p class="p1"><span class="s1" style="line-height: 1.5em;"><span>“The jury in this case will be handed a square peg and asked to choose between two round holes,” he wrote. “The test the California courts have developed over the 20th Century for classifying workers isn’t very helpful in addressing this 21st Century problem.”</span></span></p>
<p class="p1"><span class="s1" style="line-height: 1.5em;"><span>Liss-Riordan doesn't buy that argument though.&nbsp;</span></span></p>
<p class="p1"><span class="s1">"It’s a new more convenient way to provide services," she said. "But it doesn’t change anything about the basic fact that they are a company that provides a service and the workers that provide a service are under their control."</span></p>
<h2 class="p1"><span style="line-height: 1.5em;">A woman versus an industry</span></h2>
<p><span style="line-height: 1.5em;">Liss-Riordan isn't out to take Uber down.&nbsp;</span><span style="line-height: 1.5em;">Despite her friend's initial worry that she was going to put them out of business, she doesn't think she will.</span></p>
<p><span style="line-height: 1.5em;"><span style="line-height: 1.5em;">"</span>I think Uber will do just fine if they have to play by the rules. Silicon Valley will do just fine as well. Maybe some won’t make it, but the market will figure it out," Liss-Riordan said. "It’s important that we have these laws, and I still think they’re good laws<span style="line-height: 1.5em;">."</span></span></p>
<p><span style="line-height: 1.5em;"><span style="line-height: 1.5em;">If Liss-Riordan wins, it also won't mean that the positions will evaporate, although it will take some "rejiggering" of the companies business models to convert everyone to employees, she said.&nbsp;</span></span></p>
<p><span style="line-height: 1.5em;"><span style="line-height: 1.5em;">There are examples of on-demand companies who already hire part-time and full-time employees in what are normally contract worker positions. </span></span></p>
<p><span style="line-height: 1.5em;"><span style="line-height: 1.5em;"><a href="https://www.managedbyq.com/"><img style="float:right;" src="http://static6.businessinsider.com/image/556627e66da811cc67d17be5-858-643/managed-by-q-2.jpg" border="0" alt="managed by q" width="600">Managed By Q</a>, a New York-based office management startup, hired a full staff of cleaners because it was looking to retain happy employees and knew it wanted a W-2 workforce. It had to build a sophisticated labor planning model to build in flexibility and different hours, especially since office cleaning is normally an off peak job, said co-founder Dan Teran at the On Demand conference.&nbsp;</span></span></p>
<p><span style="line-height: 1.5em;"><a href="https://munchery.com/">Munchery</a>, a food delivery startup in San Francisco, hires its drivers as employees and schedules them in delivery shifts. Because they are employees, it also means it pays out overtime when needed — something it happily <a href="https://munchery.com/jobs/s0EKnN/delivery-driver/">advertises on its job page</a>.</span></p>
<p><span style="line-height: 1.5em;">"</span><span style="line-height: 1.5em;">Employers across the country are providing flexibility to employees because a lot of employees are demanding it.</span> Just because we win the case doesn’t mean that will go away. It doesn’t mean people will have to work on a 9-5 schedule," Liss-Riordan said. "Our point is that if you are working and you are subject to rules that employees are subject to, then you are also need to have the rights that our legislature has said employees should have as well."</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/managed-by-q-hires-cleaners-as-employees-2015-3" >Companies like Uber could learn a thing or two from this office cleaning startup, where the workers are as happy as the clients</a></strong></p>
<p><a href="http://www.businessinsider.com/shannon-liss-riordan-the-lawyer-behind-ubers-lawsuit-2015-6#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/general-mcchrystal-manage-company-us-army-uber-2015-5">Gen. Stanley McChrystal on how Uber operates just like a special forces unit</a></p> http://www.businessinsider.com/1099-or-w2-third-class-of-workers-needed-2015-6We need a 'third class of worker' for people like Lyft and Uber drivers, says investorhttp://www.businessinsider.com/1099-or-w2-third-class-of-workers-needed-2015-6
Tue, 09 Jun 2015 16:15:41 -0400Biz Carson
<p><img style="float:right;" src="http://static3.businessinsider.com/image/5577366c6bb3f76b6ae55af0-600-/instacart-delivery-guy-6.jpg" border="0" alt="instacart delivery guy" width="600"></p><p></p>
<p>There's a war brewing over what to call the Uber and Lyft drivers in this world, and "employee" might not be the answer.&nbsp;</p>
<p>"I think it's not 1099 versus W-2. I think the right answer is a third class of worker," said Simon Rothman, a partner at Greylock and an investor in Sprig, which uses 1099 employees.&nbsp;"People are now becoming one-person companies, and they're not even working for one entity."</p>
<p>The new economic model championed by the on-demand economy relies on a steady stream of <a href="http://www.businessinsider.com/uber-lyft-business-models-and-lawsuits-2015-3">1099 contract workers</a>. They are called 1099 workers because of the IRS tax form "1099 MISC" that they fill out when hired, compared to the traditional W2 that full-time employees complete.</p>
<p>It's a business model that's being contested in court&nbsp;after Boston labor rights attorney&nbsp;<a href="http://www.businessinsider.com/shannon-liss-riordan-the-lawyer-behind-ubers-lawsuit-2015-5">Shannon Liss-Riordan sued</a>&nbsp;Uber and Lyft.</p>
<p>While Rothman acknowledged that it is likely going to be the W-2 that wins out, it is still "fundamentally wrong," he said on a panel at the grand opening of <a href="https://driveshift.com/cars/san-francisco">Shift</a>'s new offices.</p>
<p>Rothman's argument centered around the fact that many of the 1099 contractors don't have loya<span style="line-height: 1.5em;">lty to a singular company and are instead becoming one-person companies by working for several platforms. </span></p>
<p>The 2015 1099 Economy Workforce Report&nbsp;found that <a href="http://www.businessinsider.com/new-study-shows-importance-of-cash-to-the-1099-workforce-2015-5">38 percent of the on-demand workers</a> are signed on to multiple companies at once while 13 percent said they switched companies to try to leverage the sign-up bonuses.&nbsp;<img src="http://static4.businessinsider.com/image/557743e5eab8ea427245a3da-1200-924/uber-lyft-4.jpg" border="0" alt="uber lyft"></p>
<p>If you unbundle benefits from companies or substitute them on a pro-rata basis, that's when you can create a new flexible labor class that matches how the delivery drivers or house cleaners of the on-demand economy see their jobs, Rothman said. He would love to see companies start personalized healthcare that travels with you and not dependent on your employer.&nbsp;</p>
<p>"I think this new class of worker has to reflect this new type of work that's being done," Rothman said.&nbsp;"If you decouple the benefits, if you decouple the pension so it's not tied with you, think about the control you can have, going out of the networks as you wish, controlling the what and when of your job."</p>
<p>Rothman is not the only person thinking about the third labor class either. In Germany, as Shift's founder George Arison noted on the panel, <a href="http://www.wsj.com/articles/what-if-there-were-a-new-type-of-worker-dependent-contractor-1422405831">there is already a third class</a> of "dependent contractors".&nbsp;</p>
<p><span style="line-height: 1.5em;">Even in the Lyft case, U.S. District Judge Vince Chhabria&nbsp;</span><a href="http://www.forbes.com/sites/ellenhuet/2015/03/11/lyft-uber-employee-jury-trial-ruling/">said in a March decision</a><span style="line-height: 1.5em;">&nbsp;that he's not sure if Lyft drivers fit in either category of California's "outdated" employment codes.</span></p>
<p><span style="line-height: 1.5em;">“The jury in this case will be handed a square peg and asked to choose between two round holes,” he wrote. “The test the California courts have developed over the 20th Century for classifying workers isn’t very helpful in addressing this 21st Century problem.”</span></p>
<p>Rothman also saw it as an evolution of the labor system.</p>
<p><span style="line-height: 1.5em;">"What's happened over the last generation is that you no longer have one career with one employer, but you expect to have one employer at a time," Rothman said. "Why can't you work for 5 platforms, or 50 platforms at a time?"</span></p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/shannon-liss-riordan-the-lawyer-behind-ubers-lawsuit-2015-5" >This lawyer fought for FedEx drivers and strippers. Now she's standing up for Uber drivers</a></strong></p>
<p><a href="http://www.businessinsider.com/1099-or-w2-third-class-of-workers-needed-2015-6#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/ubereats-uber-meals-takeout-delivery-fast-food-2015-5">Uber has a new ad that promises to change everything about the food delivery game</a></p> http://www.businessinsider.com/shannon-liss-riordan-the-lawyer-behind-ubers-lawsuit-2015-5This lawyer fought for FedEx drivers and strippers. Now she's standing up for Uber drivershttp://www.businessinsider.com/shannon-liss-riordan-the-lawyer-behind-ubers-lawsuit-2015-5
Wed, 27 May 2015 16:26:00 -0400Biz Carson
<p><img style="float:right;" src="http://static3.businessinsider.com/image/5565ea6feab8eaf118e3045c-600-/shannon-liss-riordan.jpg" border="0" alt="Shannon Liss-Riordan" width="600"></p><p>Shannon Liss-Riordan was having dinner in San Francisco when a friend insisted he show her this life-changing app.</p>
<p><span style="line-height: 1.5em;">He opened up Uber and walked her through the process: you set your location and a driver in their own car comes and picks you up. Everyone's private driver, as the company first advertised.</span></p>
<p><span style="line-height: 1.5em;">The app would change Liss-Riordan's life, but not for the reasons her friend was thinking. </span></p>
<p><span style="line-height: 1.5em;">Instead of being awed by its car-summoning abilities, Liss-Riordan's brain, like always, was focused on the people powering the business.</span></p>
<p class="p1"><span class="s1">"</span><span style="line-height: 1.5em;">I’m standing there looking at him, and he looks up at me and realizes what’s going through my head.&nbsp;<span>And he says 'N</span></span><span style="line-height: 1.5em;">o, don’t you dare. You’re going to put this company out of business, aren’t you?"</span><span style="line-height: 1.5em;">&nbsp;Liss-Riordan told Business Insider.&nbsp;</span><span style="line-height: 1.5em;">"That was my first introduction to Uber. I didn’t actually sue them until a year or more after that."</span></p>
<p class="p1"><span style="line-height: 1.5em;"><span>Liss-Riordan, a Boston-based employment rights lawyer, waited until</span>&nbsp;August 16, 2013, to be exact.&nbsp;</span><span style="line-height: 1.5em;">She later filed a similar suit against Lyft. Both suits have since been whittled down to workers in California.</span></p>
<p class="p1"><span style="line-height: 1.5em;">At the heart of the matter is a how these companies classify their workforce.</span></p>
<h2 class="p1"><strong><span style="line-height: 1.5em;">The "1099 economy"</span></strong></h2>
<p class="p1"><span style="line-height: 1.5em;">Uber and Lyft drivers claim their drivers are independent contractors, not employees. Seen through Silicon Valley's rose-colored lenses, these are self-fulfilling entrepreneurs sitting behind the wheel, taking control of their own destinies and filling their schedules with as little or as much work as they want. </span></p>
<p class="p1"><span style="line-height: 1.5em;"><img style="float:right;" src="http://static2.businessinsider.com/image/5425d98feab8eaa87ce14f55-1200-858/img_6377-2.jpg" border="0" alt="lyft driver" width="600">These folks make up the backbone of what's known as the "1099 economy," because these flexible workers</span><span style="line-height: 1.5em;">&nbsp;fill out the tax form known as the 1099 MISC, used for freelancers and contractors, rather than a W2, used for full-time employees.&nbsp;They do the labor at most of the "<a href="http://www.businessinsider.com/san-francisco-tech-startups-replacing-mom-2015-5">Uber for X" companies</a> that have proliferated in the last few years, particularly in the San Francisco Bay Area.&nbsp;</span></p>
<p class="p1"><span style="line-height: 1.5em;"><span>By using contractors instead of employees, companies are not responsible for things like payroll taxes, job expenses, anti-discrimination protections or overtime pay. For bootstrapped startups, it's a cost-saving measure that can mean life or death.&nbsp;</span></span></p>
<p class="p1"><span style="line-height: 1.5em;">But Liss-Riordan isn't drinking the same venture-capital bought kool-aid as the startups who have built businesses around the 1099 economy. Rather, she views it</span><span style="line-height: 1.5em;">&nbsp;as another example of companies using contract workers as a way to skirt their obligations as an employers.</span></p>
<p class="p1"><span style="line-height: 1.5em;">"</span>I don’t believe this industry needs to be built on a system whereby the workers don’t need to receive any of the protections that we have a society that workers need to receive," she said. "I just don’t know how Uber can argue with a straight face that as a $40 billion dollar company it can’t afford to insure its drivers, pay minimum wage or pay overtime, or be reimbursed for their expenses. This is not going to put Uber out of business."</p>
<h2 class="p1"><span style="line-height: 1.5em;">What FedEx and strippers can teach Uber</span></h2>
<p class="p1"><span style="line-height: 1.5em;"><span style="line-height: 1.5em;">Liss-Riordan said she can see through Uber's smoke and mirrors because she has seen companies try to do the same thing before, whether it was FedEx misclassifying their drivers or night clubs doing the same with their exotic dancers.</span></span></p>
<p class="p1"><span style="line-height: 1.5em;"><span style="line-height: 1.5em;"><span>"They try to claim that because they’re providing services through an app they’re somehow different from all these companies I’ve been suing for all these years," Liss-Riordan said. "I just don’t believe that."</span></span></span></p>
<p class="p1"><span style="line-height: 1.5em;"><span style="line-height: 1.5em;">She first started looking into employment law after she worked with outspoken lawyer and former congresswoman Bella Abzug right out of college.&nbsp;</span></span><span style="line-height: 1.5em;">After graduating from Harvard Law, she went to a labor union in Boston where she ended up embroiled in wage and hour disputes.</span><span style="line-height: 1.5em;">&nbsp;</span><img src="http://static4.businessinsider.com/image/5565fdf46da811ce22e7d6fd-799-532/slr photo - 2015 - 2.jpg" border="0" alt="Shannon Liss-Riordan"></p>
<p class="p1"><span style="line-height: 1.5em;"><span>"</span><span>One case led to another and before I knew it I had spent a decade representing wait staff against restaurants and hotels and country clubs," Liss-Riordan said. One particular case&nbsp;</span></span><span style="line-height: 1.5em;">even led Liss-Riordan to buy part of a pizzeria and split the ownership with the employees. The pizzeria opened in 2013 with a new name:&nbsp;</span><span style="line-height: 1.5em;"></span><a href="http://thejustcrust.com/story/">The Just Crust</a><span style="line-height: 1.5em;">.&nbsp;</span></p>
<p class="p1"><span style="line-height: 1.5em;">It wasn't just wait staff that came to Liss-Riordan and her law firm, Lichten &amp; Liss-Riordan.&nbsp;</span></p>
<p class="p1"><span style="line-height: 1.5em;">Take the case of exotic dancers. Like Uber, the night clubs were arguing they were just a platform for dancers, despite keeping a percentage of the earnings and charging the dancers for each shift. </span><span style="line-height: 1.5em;">Liss-Riordan </span><a href="https://medium.com/ondemand/what-strippers-can-teach-uber-1f5b15e5b427">won the case for the strippers</a><span style="line-height: 1.5em;">.</span></p>
<p class="p1"><span style="line-height: 1.5em;"><img style="float:right;" src="http://static6.businessinsider.com/image/5566266ceab8eaee28d75d44-671-503/fedex-man-delivering-packages-2.jpg" border="0" alt="Fedex Man Delivering Packages">One of her most famous wins was a case against FedEx. </span></p>
<p class="p1"><span style="line-height: 1.5em;">Like Uber, it had been classifying its delivery drivers as independent contractors and not employees, even though they wore FedEx uniforms and drove trucks with the FedEx logo. A Massachusetts judged ruled in Liss-Riordan's favor, and the case has been repeated in several other states. (FedEx has now <a href="http://www.dcvelocity.com/articles/20150219-judge-rules-in-favor-of-fedex-ground-hunt-in--massachusetts-worker-classification-cases/">successfully appealed</a>, and it is back in court.)</span></p>
<p class="p1"><span style="line-height: 1.5em;">While Uber drivers don't wear uniforms or drive logo-emblazoned trucks around, they are arguably more monitored than the FedEx drivers are because of the constant rating system and the threat of termination if it drops too low, Liss-Riordan argued.</span></p>
<p class="p1"><span style="line-height: 1.5em;">"</span><span style="line-height: 1.5em;">Uber, like I have seen in a lot of these cases, is trying to argue that they are something different, that their drivers are something different. Just like FedEx tried to tell its drivers that. Just like strip clubs tried to tell their entertainers that," Liss-Riordan said. "But the truth is that they’re not. They get in, they do the work and they’re told how to do it and they have these rules they have to follow and they’re evaluated on a real-time basis."</span><strong style="line-height: 1.5em;"><br></strong></p>
<h2 class="p1"><span style="line-height: 1.5em;"><span>Square pegs, round holes &nbsp;</span></span></h2>
<p class="p1"><span class="s1" style="line-height: 1.5em;"><span>There's no easy litmus test, though, as to determine who is an employee and who is an independent contractor. The California Department of Industrial Relations says on its website that there is "no clear definition" of the term independent contractor — signing a 1099 form doesn't mean you are one.</span></span></p>
<p class="p1"><span class="s1" style="line-height: 1.5em;"><span class="s1">In cases of misclassification, its up to the courts to decide. In March, two judges <a href="http://www.forbes.com/sites/ellenhuet/2015/03/11/lyft-uber-employee-jury-trial-ruling/">ruled Liss-Riordan's Uber and Lyft cases will go to a trial by jury</a>. Uber had been asking for a summary judgement because it argued that it was a technology company, not a transportation company. </span></span></p>
<p class="p1"><span class="s1" style="line-height: 1.5em;"><span class="s1"><img style="float:right;" src="http://static2.businessinsider.com/image/5566273469bedd41098a841c-855-641/judge-chen-1.jpg" border="0" alt="judge chen" width="600">U.S. District Judge Edward Chen didn't buy it. "<span>The idea that Uber is simply a software platform, I don’t find that a very persuasive argument," he said in court.</span></span></span></p>
<p class="p1"><span class="s1" style="line-height: 1.5em;"><span>In the Lyft case, U.S. District Judge Vince Chhabria said in his decision that he's not sure if Lyft drivers fit in either category of California's "outdated" employment codes.</span></span></p>
<p class="p1"><span class="s1" style="line-height: 1.5em;"><span>“The jury in this case will be handed a square peg and asked to choose between two round holes,” he wrote. “The test the California courts have developed over the 20th Century for classifying workers isn’t very helpful in addressing this 21st Century problem.”</span></span></p>
<p class="p1"><span class="s1" style="line-height: 1.5em;"><span>Liss-Riordan doesn't buy that argument though.&nbsp;</span></span></p>
<p class="p1"><span class="s1">"It’s a new more convenient way to provide services," she said. "But it doesn’t change anything about the basic fact that they are a company that provides a service and the workers that provide a service are under their control."</span></p>
<h2 class="p1"><span style="line-height: 1.5em;">A woman versus an industry</span></h2>
<p><span style="line-height: 1.5em;">Liss-Riordan isn't out to take Uber down.&nbsp;</span><span style="line-height: 1.5em;">Despite her friend's initial worry that she was going to put them out of business, she doesn't think she will.</span></p>
<p><span style="line-height: 1.5em;"><span style="line-height: 1.5em;">"</span>I think Uber will do just fine if they have to play by the rules. Silicon Valley will do just fine as well. Maybe some won’t make it, but the market will figure it out," Liss-Riordan said. "It’s important that we have these laws, and I still think they’re good laws<span style="line-height: 1.5em;">."</span></span></p>
<p><span style="line-height: 1.5em;"><span style="line-height: 1.5em;">If Liss-Riordan wins, it also won't mean that the positions will evaporate, although it will take some "rejiggering" of the companies business models to convert everyone to employees, she said.&nbsp;</span></span></p>
<p><span style="line-height: 1.5em;"><span style="line-height: 1.5em;">There are examples of on-demand companies who already hire part-time and full-time employees in what are normally contract worker positions. </span></span></p>
<p><span style="line-height: 1.5em;"><span style="line-height: 1.5em;"><a href="https://www.managedbyq.com/"><img style="float:right;" src="http://static6.businessinsider.com/image/556627e66da811cc67d17be5-858-643/managed-by-q-2.jpg" border="0" alt="managed by q" width="600">Managed By Q</a>, a New York-based office management startup, hired a full staff of cleaners because it was looking to retain happy employees and knew it wanted a W-2 workforce. It had to build a sophisticated labor planning model to build in flexibility and different hours, especially since office cleaning is normally an off peak job, said co-founder Dan Teran at the On Demand conference.&nbsp;</span></span></p>
<p><span style="line-height: 1.5em;"><a href="https://munchery.com/">Munchery</a>, a food delivery startup in San Francisco, hires its drivers as employees and schedules them in delivery shifts. Because they are employees, it also means it pays out overtime when needed — something it happily <a href="https://munchery.com/jobs/s0EKnN/delivery-driver/">advertises on its job page</a>.</span></p>
<p><span style="line-height: 1.5em;">"</span><span style="line-height: 1.5em;">Employers across the country are providing flexibility to employees because a lot of employees are demanding it.</span> Just because we win the case doesn’t mean that will go away. It doesn’t mean people will have to work on a 9-5 schedule," Liss-Riordan said. "Our point is that if you are working and you are subject to rules that employees are subject to, then you are also need to have the rights that our legislature has said employees should have as well."</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/managed-by-q-hires-cleaners-as-employees-2015-3" >Companies like Uber could learn a thing or two from this office cleaning startup, where the workers are as happy as the clients</a></strong></p>
<p><a href="http://www.businessinsider.com/shannon-liss-riordan-the-lawyer-behind-ubers-lawsuit-2015-5#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/general-mcchrystal-manage-company-us-army-uber-2015-5">Gen. Stanley McChrystal on how Uber operates just like a special forces unit</a></p> http://www.businessinsider.com/new-study-shows-importance-of-cash-to-the-1099-workforce-2015-5The contractors working for companies like Uber and Postmates care more about the pay than the flexible hourshttp://www.businessinsider.com/new-study-shows-importance-of-cash-to-the-1099-workforce-2015-5
Tue, 26 May 2015 16:32:00 -0400Biz Carson
<p><img style="float:right;" src="http://static2.businessinsider.com/image/5564c52a6da811531bee93b7-600-/uber-vs-lyft-header-3.jpg" border="0" alt="uber vs lyft header" width="600"></p><p>The sharing economy attracts workers for its flexible hours, but cash is ultimately what they care about. </p>
<p>For drivers, house cleaners and delivery people working for on-demand companies, the level of pay often influences much of their decisions, dictating their schedules and the companies that they work for, according to a new study.</p>
<p><span style="line-height: 1.5em;">The study from Requests for Startups, called the </span><a href="http://www.requestsforstartups.com/survey">2015 1099 Economy Workforce Report</a><span style="line-height: 1.5em;">, found that the new class of laborers often choose to work during the most lucrative peak hours, rather than the hours that fit into their personal schedules the best. </span></p>
<p><span style="line-height: 1.5em;">And worker loyalty to any particular company is also heavily dependent on pay.</span></p>
<p>The new economic model championed by the on-demand economy relies on a steady stream of 1<a href="http://www.businessinsider.com/uber-lyft-business-models-and-lawsuits-2015-3">099 contract workers</a> and fights over how to retain them. They are called 1099 workers because of the IRS tax form "1099 MISC" that they fill out when hired, compared to the traditional W2 that full-time employees complete. (<a href="http://www.businessinsider.com/uber-and-lyft-fail-to-convince-judges-their-employees-are-independent-contractors-2015-3">This same model is being contested in court</a>.)</p>
<p><span>The 2015 1099 Economy Workforce Report focused on ride-sharing drivers, as well as workers from delivery companies like Postmates, passive income workers like Airbnb hosts and manual labor freelancers, like cleaners for Homejoy.</span></p>
<p>What attracts many people to this growing field of employment is the flexibility of the scheduling. 75 percent of almost 1,000 contract workers said that was the main reason they chose the company they work for, according to the study.</p>
<p>But, those companies still need to pay to play, or else lose their workers to the competition.</p>
<p><span style="line-height: 1.5em;">When asked why they had left other 1099 jobs, 43 percent of the 771 contract workers asked said it was because of "insufficient pay." A lack of enjoyment from their work was a second reason at 37 percent.</span></p>
<p><span style="line-height: 1.5em;">On average, the 1099 contract worker makes around $18 an hour, according to this one study. Although the "passive income" category, which includes Airbnb hosts, earned significantly higher. <a href="http://abc7news.com/business/san-francisco-set-to-introduce-nations-highest-minimum-wage/689483/">Minimum wage in San Francisco</a>, comparatively, is $12.25.</span></p>
<p><span style="line-height: 1.5em;">To make that much, contract workers are doing what they can to maximize their money while on the job, and that includes working multiple jobs.</span></p>
<p><span style="line-height: 1.5em;">Many ridesharing drivers work for both Uber and Lyft, or have a delivery company they run errands for as well.</span><span style="line-height: 1.5em;"> <span>Package shipping company Shyp's "Heroes," for example, often pick-up packages in the slower afternoons when Uber and Lyft are less busy. </span></span></p>
<p><span style="line-height: 1.5em;"></span><span style="line-height: 1.5em;">Of 1,058 workers polled, 38 percent worked for multiple on-demand services at the same time while 13 percent signed up to work for new companies to get signing bonuses. Most, 63 percent, tried to bring in extra cash by working peak hours.</span></p>
<p>Still, not having enough work was a problem. Almost half of the surveyed contract workers said that was the biggest pain point they faced. That's why you see cars idling in side streets waiting for their next dispatch, and in San Francisco, <a href="http://www.sfgate.com/business/article/There-s-now-a-clubhouse-for-Uber-Lyft-Sidecar-6002951.php#photo-7363507">drivers even have their own clubhouse</a>.</p>
<div><div>
<iframe src="//www.slideshare.net/slideshow/embed_code/key/18sL4bfnjvJ373" width="595" height="485" frameborder="0" marginwidth="0" marginheight="0" scrolling="no" style="border:1px solid #CCC; border-width:1px; margin-bottom:5px; max-width: 100%;" allowfullscreen> </iframe> <div style="margin-bottom:5px"> <strong> <a href="//www.slideshare.net/RequestsForStartups/the-2015-1099-economy-workforce-report-preview" title="The 2015 1099 Economy Workforce Report - PREVIEW ONLY" target="_blank">The 2015 1099 Economy Workforce Report - PREVIEW ONLY</a> </strong> from <strong><a href="//www.slideshare.net/RequestsForStartups" target="_blank">RequestsForStartups</a></strong> </div>
</div></div>
<p class="embed-spacer"></p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/managed-by-q-hires-cleaners-as-employees-2015-3" >Companies like Uber could learn a thing or two from this office cleaning startup, where the workers are as happy as the clients</a></strong></p>
<p><a href="http://www.businessinsider.com/new-study-shows-importance-of-cash-to-the-1099-workforce-2015-5#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/ubereats-uber-meals-takeout-delivery-fast-food-2015-5">Uber has a new ad that promises to change everything about the food delivery game</a></p> http://www.businessinsider.com/tax-tips-for-1099ers-2013-2Five Fresh Tax Tips For The Self-Employed http://www.businessinsider.com/tax-tips-for-1099ers-2013-2
Fri, 15 Feb 2013 16:38:00 -0500Nicholas Pell
<p><span style="font-size: 15px; line-height: 1.5em;"><img style="float:right;" src="http://static6.businessinsider.com/image/511e8b02eab8ea1a3400000b-400-300/screen-shot-2013-02-15-at-2.34.13-pm.jpg" border="0" alt="microsoft employees girl working" width="400" height="300" />Tax season is no walk in the park for the self-employed who have to pay their own payroll tax, in addition to their own income tax.</span></p>
<p>What&rsquo;s more, in many cases, tax information can become quickly outdated, sometimes within a year.</p>
<p>Fear not, my fellow independent contractors of the Internet.</p>
<p>Here are some hot, fresh and relevant tax tips for filing your 1099-related tax returns for 2013.</p>
<p><strong>Keep Your Receipts &mdash; All of Them</strong></p>
<p>If you haven&rsquo;t already been keeping your receipts, then you&rsquo;re probably out of luck for 2012. But moving forward, your 2013 receipts will be useful when you file your taxes next year.</p>
<p>Keep every receipt that you get over the course of a year. This is easy to do with a number of smartphone apps dedicated to helping you <a href="http://www.mint.com/blog/how-to/the-wallet-diet-using-your-smartphone-to-lighten-the-load-in-your-pocket-0113/" target="_blank" title="The Wallet Diet: Using Your Smartphone to Lighten the Load in Your Pocket">keep track of your receipts</a> and expenses (including <a href="http://mint.com" target="_blank">Mint</a>).</p>
<p>At the very minimum, just taking a picture of all your receipts and keeping them in a folder on your phone will make your deductions a lot easier come tax time next year.</p>
<p>As an independent contractor, you should be keeping track of every deduction you&rsquo;re legally entitled to. Every deduction you don&rsquo;t take advantage of will cost you, so keep those receipts!</p>
<p><strong>Think Big</strong></p>
<p>When it comes to your deductions, think big. For example, a writer friend of mine has a food column and she deducts all her food costs. She considers them a business expense because every meal she has is research.</p>
<p>If you are self-employed, you can deduct expenses related to your business.&nbsp;Did you pay for parking when you went to a business meeting? How many times did you have your home office cleaned this year?</p>
<p>Don&rsquo;t think too &ldquo;creatively&rdquo; when it comes to your deductions, but don&rsquo;t think small, either.</p>
<p>Consult a tax professional if you have any questions about business deductions and always keep this in mind: Only deduct expenses that can truly and logically be applied to running your particular business.</p>
<p><strong>Incorporate</strong></p>
<p>If a significant portion of your income is from a 1099, you might want to consider incorporating. Filing as an &ldquo;S Corp&rdquo; offers many advantages, including being able to pocket a portion of your earnings as a dividend rather than income.</p>
<p>The downside to incorporating?</p>
<p>Once you&rsquo;re a corporation, filing your own taxes becomes more elaborate. There is <a href="http://www.mint.com/blog/planning/tax-tips-for-1099ers-0213/Tax%20season%20is%20no%20walk%20in%20the%20park%20for%20the%20self-employed%20who%20have%20to%20pay%20their%20own%20payroll%20tax%20in%20addition%20to%20their%20own%20income%20tax.%20%20What%E2%80%99s%20more,%20the%20goal%20posts%20for%20tax%20season%20move%20every%20year,%20meaning%20that%20old%20information%20can%20be%20useless%20within%20a%20year.%20%20Fear%20not,%20my%20fellow%20independent%20contractors%20of%20the%20Internet.%20Here%20are%20some%20hot,%20fresh%20and%20relevant%20tax%20tips%20for%20filing%20your%201099-related%20tax%20returns%20for%202013.%20%20Keep%20Your%20Receipts%20--%20All%20of%20Them%20If%20you%20haven%E2%80%99t%20already%20been%20keeping%20your%20receipts,%20it%E2%80%99s%20a%20little%20too%20late%20to%20help%20you%20with%20your%202012%20file,%20but%20it%20will%20be%20useful%20when%20you%20file%20your%20taxes%20for%202013.%20%20Keep%20every%20receipt%20that%20you%20get%20over%20the%20course%20of%20a%20year.%20This%20is%20easy%20to%20do%20with%20a%20number%20of%20smartphone%20apps%20dedicated%20to%20helping%20you%20keep%20track%20of%20your%20receipts%20and%20expenses,%20including%20Mint.%20%20At%20the%20very%20minimum,%20just%20taking%20a%20picture%20of%20all%20your%20receipts%20and%20keeping%20them%20in%20a%20folder%20on%20your%20phone%20is%20going%20to%20make%20your%20deductions%20a%20lot%20easier%20come%20tax%20time%20next%20year.%20%20As%20an%20independent%20contractor,%20you%20should%20be%20keeping%20track%20of%20every%20deduction%20you%E2%80%99re%20legally%20entitled%20to.%20Every%20deduction%20you%20don%E2%80%99t%E2%80%99%20take%20advantage%20of%20will%20cost%20you.%20%20Think%20Big%20When%20it%20comes%20to%20your%20deductions,%20think%20big.%20For%20example,%20a%20writer%20friend%20has%20a%20food%20column%20and%20considers%20every%20meal%20she%20cooks%20to%20be%20research.%20If%20you%20are%20self-employed,%20you%20can%20deduct%20expenses%20related%20to%20your%20business.%20%20Did%20you%20pay%20for%20parking%20when%20you%20went%20to%20a%20business%20meeting?%20How%20many%20times%20did%20you%20have%20your%20home%20office%20cleaned%20this%20year?%20%20Don%E2%80%99t%20think%20too%20%E2%80%9Ccreatively%E2%80%9D%20when%20it%20comes%20to%20your%20deductions,%20but%20don%E2%80%99t%20think%20small,%20either.%20%20Consult%20a%20tax%20professional%20if%20you%20have%20any%20questions%20about%20business%20deductions%20and%20always%20keep%20this%20in%20mind:%20Only%20deduct%20expenses%20that%20you%20are%20willing%20to%20defend%20in%20front%20of%20an%20IRS%20auditor.%20%20Incorporate%20If%20a%20significant%20portion%20of%20your%20income%20is%20from%20a%201099,%20you%20might%20need%20to%20incorporate.%20Incorporating%20as%20an%20%E2%80%9CS%20Corp%E2%80%9D%20offers%20you%20the%20many%20advantages%20of%20a%20business,%20including%20being%20able%20to%20pocket%20a%20portion%20of%20your%20earnings%20as%20a%20dividend%20rather%20than%20income.%20The%20downside%20to%20incorporating?%20Once%20you%E2%80%99re%20a%20corporation,%20filing%20your%20own%20taxes%20becomes%20more%20elaborate.%20There%20is%20tax%20preparation%20software%20for%20corporations%20if%20you%20still%20want%20to%20file%20on%20your%20own,%20but%20just%20know%20that%20the%20tax%20code%20becomes%20more%20complex%20once%20you%20incorporate.%20%20Commonly%20Overlooked%20Deductions%20There%20are%20a%20number%20of%20deductions%20that%20are%20big%20money%20savers%20but%20are%20often%20overlooked%20by%20harried%201099%20workers%20trying%20to%20put%20together%20their%20taxes%20on%20the%20fly.%20%20Some%20of%20the%20things%20that%20you%E2%80%99re%20likely%20to%20overlook%20that%20can%20end%20up%20saving%20you%20big%20money%20on%20your%20taxes%20include:%20%E2%80%A2Medical%20Expenses:%20Your%20health%20insurance%20costs%20are%20dollar-for-dollar%20deductions.%20Medical%20expenses%20paid%20out%20of%20pocket%20add%20up%20quickly%20and%20can%20save%20you%20money%20on%20your%20taxes.%20%20%E2%80%A2Business%20Mileage:%20You%20can%E2%80%99t%20deduct%20the%20mileage%20for%20every%20time%20you%20use%20a%20car.%20You%20can,%20however,%20deduct%20a%20standard%20mileage%20rate%20for%20every%20time%20you%20use%20your%20car%20for%20business.%20Keep%20a%20detailed%20log%20in%20your%20car%20in%20case%20of%20an%20audit.%20%E2%80%A2Homeowner%E2%80%99s%20Insurance:%20If%20you%20have%20a%20home%20office,%20you%E2%80%99re%20allowed%20to%20deduct%20a%20portion%20of%20your%20rent%20or%20mortgage.%20This%20is%20the%20percentage%20of%20your%20home%20that%20you%20use%20for%20a%20home%20office.%20The%20deduction%20doesn%E2%80%99t%20end%20with%20what%20you%20pay%20for%20the%20space,%20however.%20You%20can%20also%20deduct%20this%20percentage%20of%20utilities%20and%20homeowner%E2%80%99s%20or%20renter%E2%80%99s%20insurance.%20%20%E2%80%A2Business%20Gifts:%20You%E2%80%99re%20allowed%20to%20deduct%20$25%20per%20person%20per%20year.%20That%20bouquet%20of%20flowers%20you%20got%20for%20a%20client%E2%80%99s%20secretary?%20Totally%20deductible.%20The%20$100%20bottle%20of%20Scotch%20you%20bought%20a%20fellow%20contractor?%20One%20quarter%20of%20that%20is%20deductible.%20%20%E2%80%A2Business%20Travel:%20There%20is%20good%20news%20for%20you%201099ers%20that%20travel%20a%20lot.%20Most%20of%20the%20things%20you%20spend%20money%20on%20while%20you%20are%20traveling%20for%20work%20are%20considered%20business%20expenses.%20A%20few%20rules%20do%20apply,%20of%20course:%20You%20have%20to%20be%20gone%20for%20more%20than%20a%20day%20and%20the%20costs%20must%20be%20related%20to%20your%20business%20trip.%20For%20example,%20you%20can%E2%80%99t%20deduct%20the%20%E2%80%9CI%20went%20to%20San%20Francisco%20and%20all%20I%20got%20was%20this%20lousy%20t-shirt%E2%80%9D%20you%20got.%20Many%20cities%20also%20have%20per%20diem%20tax%20deductions,%20so%20if%20you%20traveled%20for%20a%20significant%20amount%20of%20time,%20you%20might%20see%20greater%20deductions%20going%20that%20route.%20%20%20The%20Golden%20Rule%20of%20Deductions%20Before%20you%20get%20carried%20away%20claiming%20deductions,%20imagine%20yourself%20standing%20before%20an%20auditor%20with%20receipt%20in%20hand.%20Would%20you%20feel%20comfortable%20arguing%20that%20it%20was%20a%20business%20expense?%20If%20so,%20deduct%20it.%20If%20you%20have%20a%20shadow%20of%20a%20doubt,%20skip%20it." target="_blank">tax preparation software for corporations</a> if you are comfortable filing on your own, but just know that the tax code becomes more complex once you incorporate.</p>
<p><strong>Commonly Overlooked Deductions</strong></p>
<p>There are a number of deductions that are big money savers, but are often overlooked by harried 1099 workers trying to put together their taxes on the fly.</p>
<p>Some of the things you&rsquo;re likely to overlook that can end up saving you money include:</p>
<ul>
<li><strong>Medical Expenses: </strong>Your health insurance costs are dollar-for-dollar deductions. Medical expenses paid out-of-pocket add up quickly and can save you money on your taxes.</li>
<li><strong>Business Mileage:</strong> You can&rsquo;t deduct the mileage for every single time you use a car. You <em>can, </em>however, deduct a standard mileage rate for every time you used your car <em>for business</em>. Keep a detailed log in your car in case of an audit.</li>
<li><strong>Homeowner&rsquo;s Insurance:</strong> If you have a home office, you&rsquo;re allowed to deduct a portion of your rent or mortgage. The amount is based on the percentage of your home that is a dedicated home office (size of space and other rules apply). The deduction doesn&rsquo;t end with what you pay for the space, however. You can also deduct a percentage of the utilities and homeowner&rsquo;s or renter&rsquo;s insurance.</li>
<li><strong>Business Gifts:</strong> You&rsquo;re allowed to deduct $25 per person per year. That $25 bouquet of flowers you got for a client&rsquo;s secretary? Totally deductible. The $100 bottle of Scotch you bought a fellow contractor? One quarter of that is deductible.</li>
<li><strong>Business Travel:</strong> There is good news for you 1099ers that travel a lot. Most of the things you spend money on while you are traveling for work are considered business expenses. A few rules do apply, of course: You have to be gone for more than a day and the costs must be related to your business trip. For example, you can&rsquo;t deduct the &ldquo;I went to San Francisco and all I got was this lousy t-shirt&rdquo; you got. This is just one example, and there are more exceptions, so do your homework before you start claiming business travel deductions.&nbsp;<strong>&nbsp;</strong></li>
</ul>
<p><strong>The Golden Rule of Deductions</strong></p>
<p>Before you get carried away claiming deductions, imagine yourself standing before an auditor with the receipt in hand. Would you feel comfortable arguing that it was a business expense? If so, deduct it. If you have a shadow of a doubt, skip it.</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/whats-keeping-you-from-getting-rich-2013-2" >6 false mindsets that are keeping you from getting rich ></a></strong></p>
<p><a href="http://www.businessinsider.com/tax-tips-for-1099ers-2013-2#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/freelance-writer-tax-deductions-2012-4Freelance Writer Wants To Know If She Can Deduct Her Cable, Subway Card, Cathttp://www.businessinsider.com/freelance-writer-tax-deductions-2012-4
Tue, 17 Apr 2012 15:24:00 -0400Jill Krasny
<p><img style="float:right;" src="http://static6.businessinsider.com/image/4e98885a6bb3f74a0c000005/ringo-jill-cat-mainecoon-pets-vet-costs.jpg" border="0" alt="Ringo-Jill-cat-MaineCoon-pets-vet-costs" /></p><p>Freelance writer Alison Espach lists <a href="http://therumpus.net/2012/04/the-sunday-rumpus-essay-things-i-wanted-to-write-off-as-a-business-expense-but-didnt/#more-100046">a bunch of the things she wonders if she could write off as business expenses</a>.</p>
<p>I asked Ken Krasny, a tax attorney in Houston who happens to be my father, for his take on what she could get away with.</p>
<p><strong>Cable</strong></p>
<p>"There was period of time when I became obsessed with re-enactments on horrible cable shows ... What was it like to make a living re-enacting other people's tragedies? I didn't know. But I wrote a short story about it."</p>
<p><strong>Krasny's take:</strong>&nbsp;"Cable TV can be deductible if it's used in your trade or business," says Krasny. "For example, if you've got a waiting room and you're a doctor and need people to be entertained. Or if you're a stock trader and need to watch <a href="http://www.businessinsider.com/blackboard/cnbc" class="hidden_link">CNBC</a> or <a href="http://www.businessinsider.com/blackboard/bloomberg" class="hidden_link">Bloomberg</a> to keep an eye on the markets. It's a stretch, but&nbsp;she might be able to get away with it if she can prove that it was related to her work&nbsp;and that she actually obtained research info. from it."&nbsp;</p>
<p><strong><a href="http://www.businessinsider.com/blackboard/metro" class="hidden_link">Metro</a> North&nbsp;</strong></p>
<p>"Visiting my childhood home is essential to my writing process; it depresses and exhilarates me in certain ways that help me write teenage characters."</p>
<p><strong><strong>Krasny's</strong> take:</strong>&nbsp;"The IRS might argue that it's a personal visit and she'd need to demonstrate that it bore some relationship to her effort to write a book. If the bedroom has casual mentions in the story, she's probably not going to get very far with it. That falls into the realm of a personal expenditure, much like buying a suit for work."&nbsp;</p>
<p><strong>Road Trips &amp; Moving Expenses</strong></p>
<p>"My characters are in cars a lot ... This is probably because I am always in a Cavalier or a Volvo, always taking very long road trips from one part of the country to another ... "</p>
<p><strong><strong>Krasny's</strong> take:</strong>&nbsp;"Road trips, movies and concerts fall into a similar genre as a trip If you can show it bears some relationship to the work you're doing, then it'll be fine," says Krasny. "Say you're a food writer and sample various restaurants, but don't want to be comped or for them to know you're there. You pay cash so no one can identify you and you can write it off.&nbsp;Keeping a log of what she's doing, hopes to get out of the trip and what she saw would help.&nbsp;It's not just enough to keep a receipt; you need to explain how it relates."&nbsp;</p>
<p><strong>Cat</strong></p>
<p>"Since I'm a writer who primarily works from home I have no co-workers... I believe loneliness in the work place is one of the many reasons writers often get cats. "</p>
<p><strong><strong>Krasny's</strong>&nbsp;take:</strong>&nbsp;"A cat is not an individual. The cat is not a dependent, though it is in an economic and personal sense. It's actually negligent and could cause a penalty since it's a false deduction."&nbsp;</p>
<p><strong>Take-out</strong></p>
<p>"(Delivery) was what made someone a New Yorker. Someone who orders Seafood Fra Diavolo and eats it on a tray while watching Law &amp; Order."</p>
<p><strong><strong>Krasny's</strong>&nbsp;take:&nbsp;</strong>"No way. Unless she's on a trip. Or if she's having people over to put together a manuscript, that's a business expense. A lot of this stuff depends on the context."&nbsp;</p>
<p><strong>Absinthe</strong></p>
<p>"As a fiction writer, it's difficult to predict the images or sounds or moments that will stay with us and worm their way onto our pages ..." This was one of them.&nbsp;</p>
<p>The IRS allows some deductions for employees buying tools of their trade, but this might be taking it a bit too far. As Gail Rosen, CPA, explains,&nbsp;<a href="http://articles.businessinsider.com/2012-02-28/news/31106815_1_tax-deductions-deductible-expense-tax-returns" target="_blank">it's like claiming airfare</a>&nbsp;to Brazil&mdash;when the trip was for purchasing spatulas.&nbsp;</p>
<h3><a href="http://www.businessinsider.com/taxes-for-freelancerrs-2012-4" target="_blank">Now see how freelancers can avoid the Ninth Circle of tax filing HELL &gt;&nbsp;</a></h3><p><a href="http://www.businessinsider.com/freelance-writer-tax-deductions-2012-4#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/irs-scammed-out-of-millions-2012-3How One Californian Nearly Swindled The US Out Of $763 Millionhttp://www.businessinsider.com/irs-scammed-out-of-millions-2012-3
Wed, 21 Mar 2012 16:50:30 -0400Jana Kasperkevic and Mandi Woodruff
<p><img style="float:right;" src="http://static6.businessinsider.com/image/4f6a2695eab8ea351a000004/irs-building-irs-tax-scam.jpg" border="0" alt="IRS building, IRS, tax scam " /></p><p>In October 2009, Canadian-born Donald Mason and John Chung &nbsp;walked into a Bellingham, Wash. <a href="http://www.businessinsider.com/blackboard/bank-of-america" class="hidden_link">Bank of America</a> and tried to deposit U.S. tax refund checks totaling more than $700,000.</p>
<p>Little did they know their suspicious deposits would trigger an IRS investigation that would uncover a tax scheme so elaborate, it could have cost the U.S. more than $763 million in taxpayer dollars.</p>
<p>According to the IRS, it all started with Donald Brekke, a 55-year-old <a href="http://www.businessinsider.com/blackboard/orange" class="hidden_link">Orange</a> County resident who allegedly helped nearly 1,000 taxpayers &ndash; including more than 600 Canadians like Chung and Mason &ndash;&nbsp; prepare fraudulent tax forms.</p>
<p>Both Chung and Mason, who were later arrested and convicted of fraud, were mentioned by Brekke in <a href="http://www.businessinsider.com/seven-shady-crooks-made-120-million-by-filing-false-tax-returns-2011-12" target="_blank">the tax preparation seminars</a>&nbsp;he set up to promote his scheme as examples of what can happen to those seeking a fraudulent refund.&nbsp;</p>
<p>The seminars continued to take place even as Brekke was under investigation. He was eventually arrested in November 2010 and on March 15, a Washington District Court found him guilty of conspiracy&nbsp;and three counts of wire fraud, according to a press release.</p>
<p>But by the time investigators uncovered the scheme, the IRS says about $14 million in false claims had already been paid out to Brekke's clients. He managed to pocket more than $400,000 for himself.</p>
<p>When asked how much money is lost through scams each year, Daniel Wardlaw, a spokesperson for the IRS Crime Investigations in Seattle, told <em><a href="http://www.businessinsider.com/blackboard/business-insider" class="hidden_link">Business Insider</a></em>,&nbsp;"We don't have figures in part because it is&nbsp;our policy to try to recover all fraudulent refunds, with interest and&nbsp;penalties<strong>."&nbsp;</strong></p>
<p>Brekke is due for sentencing on June 15 and faces up to 20 years in prison, according to the IRS.</p>
<h2><a href="http://www.businessinsider.com/9-ways-to-spot-a-tax-preparation-scam-2012-1#preparers-who-work-from-home-1">Now see 9 easy ways to spot a tax preparer scam &gt;</a></h2><p><a href="http://www.businessinsider.com/irs-scammed-out-of-millions-2012-3#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/9-ways-to-spot-a-tax-preparation-scam-2012-19 Easy Ways To Spot A Tax Preparer Scam http://www.businessinsider.com/9-ways-to-spot-a-tax-preparation-scam-2012-1
Fri, 20 Jan 2012 16:01:29 -0500Jill Krasny
<p><img style="float:right;" src="http://static4.businessinsider.com/image/4ee8f2ba69beddb230000021/portfolio-unhappy-guy-taxes.jpg" border="0" alt="portfolio unhappy guy taxes " /></p><p>There's no shortage of dirty tricks scammers will play on consumers when tax season rolls around.</p>
<p>And with taxes playing a key role in this year's presidential election, you can bet they'll be in the news more often than not.</p>
<p>"Typically ones show up every year where people take advantage of our fear of not filing properly or getting as much money as we can from the IRS," said Kay <a href="http://www.businessinsider.com/blackboard/bell" class="hidden_link">Bell</a>, a tax expert who blogs at <a href="http://dontmesswithtaxes.typepad.com/" target="_blank">Don't Mess With Taxes</a>.</p>
<p>With Bell and tax preparer <a href="http://www.thetaxdude.com" target="_blank">Neil Johnson's</a> help, we've compiled 9 tip-offs to look out for this year.</p><h3>Preparers who "work from home"</h3>
<img src="http://static5.businessinsider.com/image/4f1751966bb3f76e7200003f-400-300/preparers-who-work-from-home.jpg" alt="" />
<p><p>Shady scammers tend to work from home where it's harder for them to be traced, said Johnson.&nbsp;</p>
<p>"Anyone can go into Best Buy and buy (tax software), then prepare others' taxes from home, but when they print out the return, it looks as if the actual taxpayer filed it," said Johnson. "It's going to say the return was self-prepared and that makes it hard for the preparer to be held accountable by the law."&nbsp;</p>
<p>If your preparer has shady whereabouts, drop him like a bad habit.</p></p>
<br/><br/><h3>Cultural or religious deductions</h3>
<img src="http://static1.businessinsider.com/image/4c20b48d7f8b9a52361b0000-400-300/cultural-or-religious-deductions.jpg" alt="" />
<p><p>"If someone's saying you don't have to pay your federal taxes because you're part of some religious or ethnic group, there's probably some scam that goes along with it," said Johnson.</p>
<p>Sample scams: African-American slavery reparations, or ones where the preparer puts a notation on the return, subtracting what you owe in wages from your actual income so you get all that money refunded.</p>
<p>Such scams typically take the IRS a couple years to catch, but they <em>will</em> catch it, said Johnson.</p></p>
<br/><br/><h3>Cut-and-paste logos</h3>
<img src="http://static2.businessinsider.com/image/4f175106ecad04cd4b000032-400-300/cut-and-paste-logos.jpg" alt="" />
<p><p>"Whenever people see the IRS logo they get nervous," said Johnson, adding that scammers love to prey on Americans' irrational fear of the tax man.&nbsp;</p>
<p>If the logo looks like a cut-and-paste job and was sent via email to boot, steer clear.&nbsp;</p>
<p>&nbsp;</p></p>
<br/><br/><a href="http://www.businessinsider.com/9-ways-to-spot-a-tax-preparation-scam-2012-1#phone-calls-and-emails-4">See the rest of the story at Business Insider</a>